Starz Entertainment LLC

Starz Entertainment raised its full-year adjusted OIBDA growth outlook to the mid-single digits and lifted unlevered free-cash-flow guidance to the mid-to-upper end of its prior $80 million to $120 million range, as second-quarter OTT revenue grew year over year for the first time since the fourth quarter of 2024. Total revenue was $308 million, including $221 million of OTT revenue and $87 million in linear and other revenue, while adjusted OIBDA reached $60 million. The company also secured commitments to increase credit facilities by $100 million, a move expected to reduce annual interest costs by about $4 million, and announced new and expanded partnerships with Peacock, Prime Video and Crunchyroll. Management attributed the streaming momentum to titles including Outlander, Raising Kanan and Fightland, which helped drive the second-highest quarterly audience engagement level on record.

B. Riley Securities initiated coverage on Starz Entertainment with a Buy rating, citing enthusiasm for its separation from Lionsgate and a path to a stronger financial framework not fully reflected in the current valuation. Analyst Drew Crum forecasts over-the-top revenue to grow at a compound annual rate of more than 4% from 2025 to 2029, representing 80% of total revenue, and is constructive on the new programming strategy targeting women and underrepresented audiences. Higher cash flow generation is expected to accelerate debt reduction, and the firm set a price target of $45, implying over 70% return potential from the June 25 close. Shares were up 0.1% in premarket trading to $28.94 and have more than doubled in 2026.

The fair value estimate for Starz Entertainment has been lifted from US$19.38 to US$28.50 following first-quarter results, reflecting more constructive analyst views. JPMorgan raised its price target to US$25 from US$13 while maintaining a neutral stance, and Deutsche Bank increased its target to US$26 from US$17 with a hold rating. Baird upgraded the stock, citing improved confidence in execution. Despite the higher targets, both JPMorgan and Deutsche Bank kept neutral or hold ratings, signaling that execution risks and valuation constraints remain. The revised fair value incorporates a smaller assumed revenue decline of 0.36% versus 2.81% previously, a higher net profit margin of 11.10%, a forward P/E multiple of 4.63x, and a lower discount rate of 12.0%.

Seeking Alpha analysts Max Greve and Chris DeMuth Jr. identified Lionsgate and AMC Global Media as potential takeover targets following Fox's agreement to acquire Roku at an enterprise value of around $22 billion. Greve categorized media deals into small, large, and large with parks, noting that Lionsgate and AMC Global Media could supplement existing content libraries for players like Comcast, Paramount, or Disney, while Starz might attract a new entrant with capital. DeMuth Jr. specifically pointed to Lionsgate as the next likely target, citing more demand than supply for its assets even though Netflix has disavowed interest. He also expects the Warner Bros. and Paramount deal to close but warned of a winner's curse from competitive bidding.